BETA
This is a BETA experience. You may opt-out by clicking here

More From Forbes

Edit Story

With Governor's Signature, Uber and Lyft Return to Austin

This article is more than 6 years old.

On your next visit to Austin you’ll have the option to hail an Uber or Lyft, courtesy of Texas Governor Greg Abbott’s signature on House Bill 100 on Monday.

The statewide ridesharing legislation passed the House and Senate by a two-thirds majority and thus immediately nullified Austin’s onerous regulations, which drove Uber and Lyft out of town back in May 2016. Shortly after gubernatorial ink hit paper, both apps went live, ending a year of embarrassment for the city’s reputation as a tech, music, and convention mecca.

No longer will visitors land at Austin airport, turn on their phones and scratch their heads wondering why they can’t order an Uber or Lyft. “Today is a celebration of freedom and free enterprise,” Abbott said at the signing event.

“The Austin City Council arrogantly kicked Uber and Lyft out of our city, and the Texas Legislature rightly stepped in and took that abuse of power away,” Austin resident and political strategist Matt Mackowiak tells Forbes. “Austinites can now choose any ridesharing company they want, and citizens in need of rides at high demand times, like during UT football games or during SXSW, now know that Uber and Lyft's platforms won't fail when Austin riders need them most.”

The bill prevents local governments from imposing taxes, setting rates, requiring additional licenses or permits, or imposing operational or entry requirements. There are similar laws in 41 other states, usually made necessary after local politicians team up with taxi cartels to kneecap the upstart competitor.

Such was the case in Austin. There are some people in life who seem to enjoy making petty and unnecessary rules. Some of those people happen to sit on the Austin city council. Over a year ago it imposed the type of pointless regulations that serve only to prop up entrenched taxi companies and act as a barrier to entry for those looking to earn money driving when they have time in their schedules.

Under the guise of “safety” the council imposed a fingerprinting requirement on all aspiring drivers, even though Uber and Lyft’s vigorous background checks had been doing an excellent job.

The council’s fingerprint-based background checks were a solution in search of a problem. The fingerprint database maintained by the FBI is simply a record of arrests made by local police departments and often does not indicate if a person was actually found guilty or even charged with a crime.

The accuracy of the database can be described as abysmal because local governments often fail to submit follow-up information after an arrest: “50 percent of the FBI’s records fail to include information on the final disposition of the case. The missing information is frequently beneficial to job seekers,” states a 2013 report from the National Employment Law Project.

These issues were made clear in an Oct. 13, 2015 letter from the Austin Area Urban League and the Austin Branch of the NAACP. The letter was sent to chief Austin city council fingerprint pusher Ann Kitchen. (Kitchen, it should be noted, received at least $4,000 in bundled campaign contributions from a taxi CEO). The letter states:

We are particularly concerned with a proposed provision that disproportionately impacts low-income individuals and minorities in Austin: fingerprint-based background checks. The practice of using fingerprints to access a background database is not a real safety measure as it all-too-often captures only an individual’s arrest, not their conviction. As a result, this practice would disproportionately harm Austin’s African-American and Hispanic populations as they are already disproportionately arrested, but not necessarily charged or convicted of any offense. For example, according to a USA Today study, African-Americans are arrested at a 3:1 ratio compared to white residents in Austin, despite representing fewer than 5 percent of the population. Yet the Texas Department of Public Safety recorded a final judgment for only 80 percent of arrests in 2012, according to the most recent statistics available.

Thus this provision could unfairly and inadvertently disqualify many in our community from accessing economic opportunities.

There is widespread bipartisan recognition of this problem. In an April 2015 speech at the National Press Club, U.S. Senate Judiciary Chairman Chuck Grassley (R-Iowa) said:

We’re seeing studies that show 32 percent of American adults have criminal records if arrest records are included. That means a lot of innocent people are often put in unfair situations. That’s because those records are sent to the federal government for inclusion in a database and searched during background checks.

For instance, if an employer uses the database for hiring purposes, the records can be inaccurate and old. And, just as bad, the database includes arrest records that never resulted in a conviction. It’s unfair that an arrest – not resulting in a conviction – is included in a criminal background check.

The night the city council imposed the fingerprint requirement, a party was held at a local beer garden where attendees whooped and hollered about their “victory” over “special interests.” Someone even managed to lug a podium into the beer garden, complete with a Travis County Democratic Party sign.

Austin was then left Uber-less and Lyft-less, setting the stage for action in the 2017 state legislative session. “The great thing about Austin is its proximity to Texas," says Mackowiak, the strategist. “Thousands of Texans in and around Austin have greater mobility today than they did yesterday and the Texas Legislature deserves credit.”

HB 100 was authored by Rep. Chris Paddie (R-Marshall).

Bryan T. Mathew, policy analyst at the Texas Public Policy Foundation’s Center for Local Governance, praised the bill while noting further deregulation is needed. “HB 100 advanced liberty by striking down onerous municipal ordinances that substantially raised the cost of providing ridesharing services, but with little to no actual public safety benefit,” he said. “But there’s still more work to be done. Our ultimate goal should be an open market in the entire transportation services sector that does not favor any one business model over another.”

 

Follow me on Twitter